INDEX
PREFACE BY THE MINISTER FOR COMMERCE, SCIENCE & TECHNOLOGY ...5
SCIENCE AND TECHNOLOGY (S&T) AND THE POLICY PROCESS...5
S & T IN THE MODERN CONTEXT ...5
The White Paper...7
OVERVIEW...9
SCIENCE, TECHNOLOGY AND INNOVATION (STI) - THE HIGH ROAD TO ECONOMIC DEVELOPMENT...9
S&T - THE DRIVING FORCE IN INNOVATION...10
TAKING ACTION...11
PLANNING S&T - GETTING OUR ACT TOGETHER...12
EU INVOLVEMENT IN IRISH S&T...13
THE ENTERPRISE SECTOR...14
NATURAL RESOURCE-BASED SECTORS...15
EMERGING TECHNOLOGIES...15
THE EDUCATION SECTOR...15
Third-Level Research ...15
S&T at Primary and Second Level ...17
Training and Skills ...17
Raising the Debate ...18
CONCLUSION...19
FAMOUS IRISH SCIENTISTS - ...20
ROBERT BOYLE (1627-1691) ...20
CHAPTER ONE ...21
THE POLICY FORMATION PROCESS...21
INTRODUCTION...21
SCIENCE AND TECHNOLOGY POLICY FORMATION...23
THE ROLE OF SCIENCE IN MY DAY TO DAY LIFE...25
DR. GARY O’TOOLE, ST. VINCENT’S HOSPITAL...25
CHAPTER TWO ...26
SCIENCE, TECHNOLOGY AND INNOVATION POLICY AT THE LEVEL OF THE FIRM...26
INTRODUCTION...26
SCIENCE, TECHNOLOGY AND THEIR ROLE IN INNOVATION...27
THE SITUATION IN IRELAND...28
ADDRESSING THE DEFICIENCIES...30
TECHNOLOGY TRANSFER...31
HUMAN CAPITAL...31
MULTINATIONALS AND LOCAL INDUSTRY...31
FAMOUS IRISH SCINETISTS - ...34
NICHOLAS CALLAN (1799-1864) ...34
CHAPTER THREE ...35
THE SYSTEM OF INNOVATION IN A NATIONAL AND INTERNATIONAL CONTEXT...35
INTRODUCTION...35
THE ROLE OF BASIC RESEARCH...37
INNOVATION IN ENTERPRISE...40
IMPACT OF THE EUROPEAN UNION ON THE IRISH STI ENVIRONMENT...43
THE INFORMATION SOCIETY - AN AGENDA FOR DISCUSSION...45
BUSINESS AND TRADE ASPECTS...46
WORK AND JOBS ASPECTS...47
SOCIETAL ASPECTS...48
PAT KENNY, RTE...50
CHAPTER FOUR...51
THE TIERNEY REPORT: “MAKING KNOWLEDGE WORK FOR US” ...51
INTRODUCTION...51
THE ‘INNOVATION SYSTEM’APPROACH...52
FAMOUS IRISH SCIENTISTS - ...54
KATHLEEN LONSDALE (1903-1971) ...54
CHAPTER FIVE ...55
THE GOVERNMENT’S RESPONSE AND PRIORITY ACTIONS...55
INTRODUCTION...55
THE WORK OF THE TASK FORCE...56
ACTION TO DATE...56
AREAS FOR PRIORITY ACTION...57
HOW SCIENCE, RESEARCH AND TECHNOLOGY HAVE IMPACTED ON MY LIFE AND WORK ...60
GERALD FLEMING, MET ÉIREANN...60
CHAPTER SIX ...61
NATIONAL S&T STRATEGY AND STRUCTURES...61
INTRODUCTION...62
NATIONAL S&T STRUCTURES...64
CO-ORDINATION OF S&T AT DEPARTMENTAL LEVEL...66
DEPARTMENT OF ENTERPRISE AND EMPLOYMENT...66
STI ADVISORY COUNCIL...67
FUNDING OF STI ...67
FAMOUS IRISH SCIENTISTS - ...69
WILLIAM THOMSON, LORD KELVIN (1824-1907)...69
CHAPTER SEVEN...70
INNOVATION IN ENTERPRISES...70
INTRODUCTION...71
THE PROBLEM OF SCALE: AN INTER-FIRM CO-OPERATION PROGRAMME...73
TECHNOLOGY BASE: ENTERPRISES WITH MINIMUM TECHNOLOGY...74
TECHNOLOGY BASE: A NATIONAL TECHNOLOGY BROKERAGE ACTIVITY...75
LOW BUSINESS EXPENDITURE ON R&D (BERD) ...76
FISCAL INCENTIVES...77
INTEGRATION OF FOREIGN INDUSTRY...78
STIMULATING ENTERPRISE: VENTURE CAPITAL FUNDING...78
PRODUCT DEVELOPMENT...79
A CASE STUDY 1:- BIOTRIN HOLDINGS LTD. ...80
IMPACT OF SCIENCE AND TECHNOLOGY ON MY WORKING DAY ...81
ANN RIORDAN, MICROSOFT IRELAND...81
CHAPTER EIGHT ...82
TECHNICAL SERVICES FOR ENTERPRISES...82
INTRODUCTION...83
CO-ORDINATION AND UTILISATION OF ALL RELEVANT EXPERTISE...83
COST-EFFECTIVE OPERATION OF STATE S&T SERVICES...85
THE IMPACT OF REGULATORY ACTIVITIES...86
LABORATORY ACCREDITATION...86
REGULATORY BODIES...87
STANDARDS FORMULATION...88
CASE STUDY 2:- IMPROVED CERAMIC FLUE LINERS ...89
FAMOUS IRISH SCIENTISTS - ...90
CHARLES PARSONS (1854-1931) ...90
CHAPTER NINE ...91
SUPPORT FOR NATURAL RESOURCE-BASED SECTORS...91
INTRODUCTION...92
RESEARCH IN SUPPORT OF ENVIRONMENTAL MANAGEMENT...92
AGRICULTURAL RESEARCH...93
R&D IN THE MARINE AND FORESTRY SECTORS...94
R&D IN OTHER NICHE SECTORS BASED ON NATURAL RESOURCES...95
DEVELOPMENT OF NATURAL RESOURCE-BASED FIRMS...96
CASE STUDY 3:- FOOD SAFETY...97
HOW SCIENCE, RESEARCH AND TECHNOLOGY HAS IMPACTED ON MY LIFE AND WORK BY...98
FERGAL QUINN, SUPERQUINN...98
CHAPTER TEN...100
PROGRAMMES IN ADVANCED TECHNOLOGY...100
INTRODUCTION...100
TIERNEY REPORT...101
GOVERNMENT CONSIDERATION...102
NATIONAL MICROELECTRONICS RESEARCH CENTRE (NMRC)...104
CASE STUDY 4:- BIORESEARCH IRELAND ...104
FAMOUS IRISH SCIENTSITS - ...106
HARRY FERGUSON (1884-1960)...106
CHAPTER ELEVEN...107
THIRD-LEVEL RESEARCH AND THE ROLE OF THE COLLEGES...107
RESEARCH IN THIRD-LEVEL COLLEGES...108
Introduction...108
Basic and Strategic Research...108
Health Research ...109
Funding of Post-Graduate Students...110
Equipment for Research...111
International Collaboration ...111
Performance Indicators ...112
Social Sciences...112
CLARIFYING AND STRENGTHENING THE ROLE OF RESEARCH IN THE THIRD-LEVEL SECTOR...113
Research Charter ...113
Linking Enterprise with Third-Level and Public Sector Research...113
Government Decision...114
The Department of Education and the Department of Enterprise and Employment will explore, in consultation with the third-level institutions, how best to maximise technology transfer out of the colleges. ...114
Intellectual Property Rights (IPR) ...114
Role of Regional Technical Colleges / Dublin Institute of Technology ...114
Mobility of Researchers and Students...115
CASE STUDY 5:- IONA TECHNOLOGIES ...116
PROFESSOR MIKECOOLEY, TUAM, CO. GALWAY...117
CHAPTER TWELVE...118
IMPROVED EDUCATION AND TRAINING...118
INTRODUCTION...119
DELIVERING SOCIETY’S REQUIRED OUTPUTS: S&T IN SCHOOLS...120
TRAINING AND SKILLS FOR EMPLOYMENT...122
MANAGEMENT OF R&D AND INNOVATION...124
TRAINING CERTIFICATION SYSTEM...125
GENDER BALANCE...125
CASE STUDY 6: - AER LINGUS YOUNG SCIENTISTS 1996 ...127
FAMOUS IRISH SCIENTISTS - ...128
ERNEST WALTON (1903-1995) ...128
CHAPTER THIRTEEN ...129
IMPROVED AWARENESS OF SCIENCE, TECHNOLOGY AND INNOVATION...129
INTRODUCTION...129
THE SCIENCE AND TECHNOLOGY DEBATE...130
CONCLUSION BY THE MINISTER FOR COMMERCE, SCIENCE AND TECHNOLOGY.133 NOTES...134
ACRONYMS...136
APPENDIX 1...137
TASK FORCE ON THE IMPLEMENTATION OF THE ...137
STIAC REPORT...137
APPENDIX 2...138
PREFACE BY THE MINISTER FOR COMMERCE, SCIENCE & TECHNOLOGY
Science and Technology (S&T) and the Policy Process
In the abstract, policy formation involves a process of philosophical debate, policy analysis, public consultation and examination of the practical implications before moving to decision and finally to implementation. In the world of government, before proceeding to implementation, debate and consultation are sometimes achieved through the ‘Green Paper’ process. Concrete decisions are then normally translated into a White Paper, usually the precursor to the final stage of implementation and, perhaps, legislation.
Even though governments change, some things remain the same. There is, in many policy areas, a strong element of continuity despite changes in the Ministerial or party composition of governments.
The debate that preceded this White Paper can trace its origins to the National Economic and Social Council (NESC) and two economic reports in 1992 and 1993 (Lars Mjoset’s The Irish Economy in a Comparative Institutional Perspective and the Council’s Strategy for Competitiveness, Growth and Employment). This led to the stage of a more science and technology-focused consideration by the Science, Technology and Innovation Advisory Council (STIAC) culminating in its 1995 Report, Making Knowledge Work for Us, and the Government’s deliberations and consideration of its recommendations. I would like to take this opportunity to pay special tribute to Mr. Dan Tierney and the members of STIAC for their contribution to this process. I would also like to thank John Travers and the members of the Task Force, for their thorough examination of the TIERNEY recommendations on behalf of the Government.
The STIAC process was consultative, although confined largely to the immediate S&T players: the scientific community, industrialists, and the public sector working in the S&T area.
It was the first totally indigenous, and the most comprehensive ever, review of science policy in Ireland. It achieved a valuable degree of consensus among disparate parties with conflicting views. It was undertaken at a time of increasing commitment of the taxpayers’ money to the area and of a growing international recognition of the economic importance of science and technology, evidenced by the technological revolution the world is now living through.
S & T IN THE MODERN CONTEXT
popular culture, literature and the performing arts. Therefore, one of the purposes of this White Paper is to provoke a more open discussion, a more wide-ranging debate, taking in the wider public.
Historically and internationally, science policy has not necessarily been about employment and economics. There are examples also of science policy being driven by a belief in science in its own right, that spending on science is its own justification. There are examples also of science policy pursued and driven by the call to arms, whether for defensive or offensive purposes.
In Ireland, for much of the period since the foundation of the State, science and S&T policy were very much ignored and neglected. Formally, this began to change during the 1960s: the National Science Council, later to become the National Board for Science and Technology (NBST), was established. In the late eighties, the NBST was merged with the Institute for Industrial Research and Standards (IIRS) to become EOLAS. However, funding for research, which by definition requires a sustained commitment, was never adequate or secure. The national establishment culture was not supportive.
Since the late eighties, this has begun to change. Much of this has been as a result of the European Union’s budget and transfers to Ireland, whether via structural funds or the EU’s own research programmes. The view now is one of appreciation, on the surface at least, of the importance of S&T to national development.
This is very much in line with the trend in the European Union as expressed in the Delors White Paper and the recent Green Paper on Innovation. A major debate on the role and purpose of science - how far down the road of relevance and application we should go - is taking place in the Member States as well as at EU level, and will continue over the coming months and years.
For the foreseeable future therefore, S&T funding in Ireland is reasonably secure and we must seize that opportunity to develop the national S&T base and to become convinced, as of right, of the importance of S&T in the development of the nation. One need look no further than the enormous transformations which the Information Society is bringing to all aspects of our daily lives to appreciate the pervasiveness of technology, to imagine the potential impact it will have on the way we work, live and play and, in turn, the consequences for society at large.
S & T IN A SOCIETAL CONTEXT
“Research is elitist by nature. This makes it difficult for citizens and politicians to judge where resources for research should be best placed and where they would be of greatest advantage. However, it is not elitist to determine what Denmark should research into, or rather what we shall live on in order to secure our welfare. Therefore, the Government wants an open dialogue on society’s priorities.”
In seeking to promote greater public debate on S&T issues, there are three simple but profound questions we can ask of the scientific and technological community which seeks public funding. They are: What does your project do for jobs? What does it do for society? And what are its implications for the environment?
Increasingly, governments are asking these questions of their research and scientific community - and, indeed, of other recipients of public funding.
These questions imply a fundamental shift in approach: Away from looking on public funding as investment in inputs (e.g. salaries, equipment, bricks and mortar) and towards seeing Exchequer funding as the purchase of outputs (e.g. jobs, social improvement and environmental quality).
At the heart of this shift is a move towards a ‘contractarian’ philosophy and practice. As a society we have certain intrinsic objectives (e.g. more jobs, better opportunities, the right to make the most of oneself, a clean environment) and we pursue instrumental goals to achieve them (an educational system and economic and social environment that enables us to fulfil our potential). As a society we also have a ‘contract’ with the State, whereby Government contracts to ‘purchase’ necessary instrumental outputs from providers such as the Universities and State agencies, transparently and economically.
This contractarian framework enables the Government to evaluate proposals from the point of view of effect, relevance and value for money in the context of limited and competing demands for resources (i.e. the taxpayers earned income) and the accountability of Government to the voter.
The White Paper
The approach taken in this White Paper is one that locates S & T firmly within the framework of wider industrial, economic and national development policy and, therefore, into the area of jobs and living standards. This White Paper is about the kind of jobs, indeed the kind of society, we want for the future.
We are investing ever-increasing resources in our universities, our colleges and industry. We are producing a large number of highly skilled, creative, enterprising and imaginative young people. We cannot predict where their final destination will be but we must influence the number and quality of opportunities for them to live and work in Ireland.
Our aim is to build an innovative economy and society which are founded on a competence in, and a comfort with, modern scientific and technological developments. To do that, we have to invest wisely, always challenging whether that investment is producing the best outcomes or whether it could be channelled more effectively.
__________________________ Pat Rabbitte TD
Overview
This is the first ever White Paper on Science and Technology.
For much of the period since the foundation of the State, Science and Technology (S&T) has been very much ignored and neglected. While this began to change through the ‘70’s and ‘80’s, there is still, despite the pervasive impact of technology in our daily lives, a weak representation of S&T issues in public affairs in Ireland and, more generally, a lack of awareness shown by the public in S&T affairs. A successful policy for S&T and its role in innovation requires a positive public attitude, as well as a sustained commitment by successive Governments over the long-term.
Science, Technology and Innovation (STI) - the High Road to Economic Development
The Irish economy is going through a boom period, with low inflation, low interest rates, the public finances are under control and record levels of jobs are being created. Nevertheless, unemployment remains persistently high and our success in attracting foreign companies to invest in Ireland masks weaknesses in the indigenous sector, comprising mainly small and medium-sized companies.
Barriers to international trade are falling and the world is undergoing a new industrial revolution - the Knowledge Revolution - fuelled by the pace of technological change. If Ireland is to capitalise on these developments we must plan our policy interventions around companies that can compete, that will grow and create jobs based on research and technological innovation. Our aim must be to build an innovative economy and society founded on a competence in, and a comfort with, modern scientific and technological developments.
The TIERNEY Report on Science, Technology and Innovation was the first totally indigenous review of policy in this area. It concluded that “we have assumed that as a small relatively isolated country, we do not need to develop our own expertise and can rely on purchasing innovation from others”. This model has worked to a significant degree especially in terms of creating in Ireland a powerful dynamic group of leading overseas companies, using and developing advanced technologies and creating thousands of skilled jobs and exports. But the purchasing of innovation from others also implies that the indigenous sector is losing out in terms of growth foregone, jobs lost, unemployment much higher than it should be, loss of markets, and the worst of all, the loss of talent and the blighting of human potential.
STI policy must therefore work to create an economy characterised by sustainable high employment, high living standards, competition and innovation in an enterprise sector:
- engaged in trading products and services using processes and technologies all of which continuously improve to meet the highest international competition;
- generating and enhancing, as well as absorbing, new technology and new techniques;
- placing particular emphasis on raising the competence of indigenous companies.
The approach taken in this White Paper is one that locates S&T firmly within the framework of wider industrial, economic and national development and therefore into the area of jobs and living standards. This White Paper is about the kind of jobs - indeed the kind of society - we want for the future.
S&T - The Driving Force in Innovation
Innovation is about how to better make a widget and how to make a better widget. It is about ideas, it is about ways of working, new ways of organising, manufacturing a product, designing or developing an entirely new product or modifying a machine or plant. Innovation is about progress, however defined.
However, innovation is becoming more and more critically dependent on advances in the field of science and technology. We need look no further than the enormous transformation brought about by Information Technology for evidence of the inter-relationship between science, technology and innovation.
Historically, science policy has not always been about employment and economics. There are examples of science policy being “elitist”, driven by a belief in science in its own right - that spending on science is its own justification. In modern times, however, and particularly in the fast growth sectors, there are much closer links between product and process innovation, technological advancement and the scientific research upon which they depend.
A critical feature of STI policy therefore is to strongly and overtly link S&T to Innovation and to place it in the context of national development. S&T will be evaluated by its ability to contribute to wider national goals, as a means of achieving them rather than as an end in itself.
Innovation, however, is not a simple, smooth, linear, well behaved process. It is complex and hard to measure. For example, innovation may draw on science but the demands of innovation often, too, force the creation of science. While the interactions of science, technology and innovation are very strong, this should not lead us to accept a common wisdom that technology is merely applied science.
- universities and similar institutions providing basic research and the development of high levels of knowledge and skills;
- business firms, especially those investing in change-generating activities;
- public and private institutions providing general education and vocational training;
- the Government sector, financing and performing a variety of activities that both promote and regulate technical change;
- a venturesome financial sector committed to funding innovation activities.
Taking Action
The TIERNEY Report argues that our failure to develop a national system of innovation is rooted in a weak commitment, even indifference, in national culture to enterprise and innovation, to Science and Technology, to its application and development. TIERNEY concluded that a new vision of innovation is needed embracing the knowledge and skills generated through science and technology. The Report calls for a programme of planned, sustained and increased investment in research, development and technology application, significant institutional reform and a programme to raise appreciation of the role of science, technology and innovation. It is the aim of this Government to pursue this programme.
In analysing the TIERNEY Report and examining the policy issues fundamental to science, technology and innovation, the Government has already taken action in a number of the more immediately critical areas;
- basic research funding and support for PhDs have been increased;
- administration of third-level research schemes has been improved;
- new funding was provided for post-doctoral research and international collaboration;
- extra funding was provided for schemes to help small firms improve their technological capability, such as Techstart and technology audits;
- taxation measures were introduced to encourage business R&D;
- a scheme to provide training for companies in R&D and innovation management was introduced;
- a programme to encourage networking of firms is being piloted;
Now this White Paper sets out the priority needs to be addressed. They are:
- a planning process for State investment in science and technology to ensure a coherent approach to policy and programmes spread over 12 Departments and over 30 Agencies;
- expert and independent advice from a new permanent STI Council;
- a substantial increase in business spending on R&D including examination of the tax regime to encourage R&D investment;
- a higher profile for technology transfer in industry as an important complement to in-house R&D;
- improvement in the capability of firms which currently have little or no technological competence:
- increased networking of firms to overcome disadvantages of scale;
- address barriers to the availability of seed and venture capital for technology based companies;
- recognition of the role of research in the third-level sector and the provision of extra funding as resources permit;
- improved organisational structures for the Programmes in Advanced Technology (PATS) which invest substantially in third-level/industry research;
improved public perception of STI and its contribution to national development.
Planning S&T - Getting our Act Together
This White Paper must be seen in the wider context of reform of the public sector through the Strategic Management Initiative and changes to public expenditure programming in general. It is an attempt in a significant area of public expenditure to impose a basis for good decision making through rationality, clarity of social and economic purpose and value for money.
The Government agrees that if the Irish economy is to compete effectively in an era of rapid technological change, then the level and quality of S&T investment must be internationally competitive. However, that is a major task that cannot be achieved overnight. The State already invests in the order of £780 million per annum into a broad range of S&T-related activities, including in the education and health areas, but the composition of this investment is only known after the event. The long term objective is to channel this considerable spend into areas where it will be most productive and to engender competition between all the areas which seek funds.
The Government accepts that because of the size, importance and widespread nature of its investment in S&T, organisational structures are required which will provide a long term strategy, facilitate planning of S&T spending and ensure efficiency and value for money. Above all - given our limited resources, our ambition to build a strong system of innovation, and S&T’s role in this project - priorities must be established as to where and how S&T funds should be allocated.
The Government has decided to adopt an integrated planning process for prioritising S&T spending, based on the current Science Budget compiled by Forfás and the spending plans of Departments. The process will form an integral part of the annual Estimates and Budget cycles. A Cabinet Committee on STI will direct the process, which will be conducted by an Inter-Departmental Committee. To provide independent expert advice on STI policy and programmes, the Government has decided to establish a new permanent STI Advisory Council.
EU Involvement in Irish S&T
Investment in scientific research and technological development in Ireland has been radically transformed over the last decade by two major external influences sponsored by the European Union - Structural Funds which began in 1989 and the EU’s own Research Framework Programmes. The latest round of Structural Funds provides for public R&D expenditure of some £260 million over 1994 to 1999, over 80% of which is EU money. Under the EU’s 4th Framework Programme (1994 to 1998) Irish researchers are winning contracts to an annual value of £20 million.
European funding and programmes have, therefore, had a hugely beneficial impact on the Irish science and technology scene by allowing us to develop our own national capability, by leveraging private investment on top of the considerable public monies and by providing opportunities for Irish researchers, to network with organisations abroad.
There is concern that with the major political changes in Europe, a radical shift in the existing Structural Funds system post-1999 is now more in prospect. Equally, in relation to the 5th Framework Programme, due to start in 1998, the preliminary proposals from the Commission have tended to concentrate on a narrow range of activities corresponding to the pressing needs of larger European industry.
EU support for S&T in Ireland, it would put pressure on the national exchequer to meet any shortfall.
The Enterprise Sector
Innovation policy is an overarching framework that must link industrial policy, S&T policy, fiscal, educational and commercial law policy with wider economic and social policy. Ireland’s failure to become an innovation-driven economy will result in our being squeezed between those, mostly large, countries which develop new technologies themselves, and low cost - low wage economies adapting technology developed elsewhere.
Innovation is ultimately a matter for firms themselves. In Ireland, however, there is still an enormous problem with business spending on research, development and innovation. While spending has been growing at a rate of around 17% per annum since the beginning of the decade, two thirds of Ireland’s R&D spending is accounted for by the overseas sector although some three quarters of multinationals do not undertake large scale, systematic R&D in Ireland. More worryingly, however, the vast majority of domestic companies in most sectors of industry undertake no research and development. There is a low level of innovation, reflecting a poor culture and appreciation of science, technology and innovation in the national business community.
The TIERNEY Report identified the key problems to be addressed as:
- low-level commitment to R&D, innovation and entrepreneurship;
- lack of integration of multinational enterprises into the economy;
- the small size and scale of Irish firms;
- the low technology base of most Irish firms.
Business spending on R&D will continue to be driven by a number of factors including direct State support, fiscal incentives, a more positive perception of technology and innovation in business and a general improvement in the economic and investment climate.
The Department of Enterprise and Employment will monitor the operation of the
national technology brokerage activity to strengthen technology transfer into Irish industry.
To develop the low technology base found in most Irish firms, the Government has provided funding to increase technical graduate placements from 215 to 300 this year. It has also provided increased funding for technology audits and technology brokerage to help companies to understand and absorb new technological developments.
Natural Resource-based Sectors
Within the enterprise sector, Ireland possesses major assets in terms of environmental, agricultural, marine and forestry resources. However, with the exception of agriculture, their potential role in the national economy has not been adequately recognised in the past. There is a need for S&T initiatives to realise the full benefits to the country.
The Minister for the Environment is drawing up a national sustainable development strategy for the environment, including supporting S&T programmes. The Department of Agriculture and Teagasc will examine the level of contributions of the farming community for agricultural research. Food research centres, which receive funding from a number of sources, will have clear Mission Statements, including technology transfer activities. Increased funding for the Marine and Forestry sectors will be examined in the context of the annual Estimates.
Emerging Technologies
State programmes in a number of key technology areas, such as biotechnology and telecommunications, undertake some £20 million of R&D per annum in developing third-level and industry expertise in these areas. The Programmes in Advanced Technology (PATS) have been largely successful in meeting their objectives. However, they require an organisational structure which provides for a common approach to the individual programmes, a competitive funding arrangement to allow new programmes to emerge (or unsuccessful programmes to die), which respects the partnership approach involving the third-level, industry and the State, which provides the vision and dynamism for advanced research, and which places emphasis on the development needs of indigenous industry.
The Education Sector Third-Level Research
No subject in the history of public policy debate has generated more heat and less light than the controversy over the role and significance of basic research in the innovation system. Does basic research lead directly to economic benefit for the State in which it is carried out?
It is difficult for any country, particularly a small country, to justify significant investment in basic science across a wide range of disciplines in terms of the contribution it will make to that country’s industrial innovation. But there are persuasive arguments for maintaining a basic research capability, including:
- the need to be strong in the basic science of areas of strategic national importance, such as the bio-sciences which are fundamental to health and to the food chain;
- maintaining internationally recognised standards in third-level education;
- ensuring that Irish colleges are attractive to the best Irish undergraduates and post-graduate students and retaining high quality people in Ireland;
- the creation of a pool of skilled researchers and the strengthening of our capacity to participate in international research as an essential basis for industrial and economic development.
Thus, in terms of building a strong national system of innovation, the value of curiosity and the stock of human capital are particularly important. The basic research system is part, literally, of a world wide web of researchers through which Ireland can participate in knowledge generation and acquisition. Basic research funding cannot, therefore, be ignored by STI policy. But in the context of limited resources and the need to build strong links between the third level and the economy, the basic research system must reflect the pressures of prioritisation and relevance.
TIERNEY pointed out that Ireland lacks the Research Council system for funding basic research found in other countries and that this gap has been only partly filled by the Basic Research Grants scheme operated by the Department of Enterprise and Employment. This scheme has increased funding for basic research from £1 million in 1994 to £2 million in 1996. Strategic research funding increased from £0.5 million to £1.2 million in the same period. Health research funding increased from £2.3 million in 1995 to £2.74 million in 1996. The Government accepts that funding for basic and strategic research should be increased as resources permit. It should be allocated according to the excellence of the research, relevance to national economic development, prioritisation of research and performance measurement.
rationalised, and gaps in the numbers and disciplines need to be identified and tackled. To provide research and teaching to the necessary international standard requires access to modern equipment and interaction between the Irish science base and overseas resources. The Department of Enterprise and Employment has doubled the annual PhD research scholarship grant to £2,000 and has launched a scheme for post-doctoral research at a rate of £20,000 per annum for two years. The Department of Education has also introduced a post-doctoral research scheme. The Department of Enterprise and Employment has allocated £200,000 in 1996 for new international research collaboration projects. The Government has asked the Department of Education and the Department of Enterprise and Employment to prepare proposals for the future funding of research equipment.
The TIERNEY Report stressed the importance of improving linkages between enterprise and third-level colleges and the need for the colleges to devote adequate resources to technology transfer activities. Because of their regional dimension, the RTCs have a particularly important role in this regard. To clarify their approach to research, and particularly college/industry collaboration, each third-level college will publish a Research Charter. Forbairt will consult the RTCs and universities as appropriate in the preparation of regional development plans.
S&T at Primary and Second Level
If we are to develop a more positive culture towards science, research, technology and innovation in Irish society, one of the most important determinants will be the primary and second-level education system. In that context, for example, Information Technology has to be seen as more than a subject on the curriculum. If it is to be ingrained in the minds of young people, it has to be fully utilised as a whole new means of teaching and learning.
The Government endorses the efforts of the National Council for Curriculum and Assessment towards improved teaching of science and technology and there will continue to be improvement in this aspect of the curriculum. There are strong arguments for making technology and enterprise mainstream - even mandatory subjects, especially at second level. The Government accepts that there are considerable resource implications involved, including materials, equipment, experimental facilities and teacher training. Such resources must be available on an equitable basis throughout all schools, rather than allow a two-tier approach to the education of S&T to develop.
Training and Skills
Particularly in the S&T field, with the large and growing numbers being routed through the third-level system and the increasing intensity of the points race, there is a need to ensure that course availability and content is linked to the needs of the economy and the likely sources of employment.
The Department of Enterprise and Employment will produce a White Paper on Human Resource Development in the near future, which will include the need for greater emphasis on skill development and retraining for the employed and on the importance of training for innovation across the full range of firms’ activities.
On the question of gender balance in S&T subjects, the State and industry lose out if female S&T graduates are not given equal opportunity to use their talents in the business sector. The Departments of Education and Equality and Law Reform will support initiatives to give effect to the strong commitment to equality set out in the White Paper on Education.
Raising the Debate
All the decisions in relation to specific programmes or issues will have a lesser impact unless there is a generally improved public perception of science and technology.
We need to develop an ability at national level to feel as comfortable discussing issues which have a scientific or technological angle, as we do about popular culture, literature and the performing arts. Therefore, one of the purposes of this White Paper is to provoke a more open discussion, a more wide ranging debate, taking in the broad public. The White Paper represents but the latest step in what is intended as a continuous process of assessment in a crucially important area of public policy.
Apart from its intrinsic merits, science and technology is also increasingly bound up with huge moral and political - philosophical issues, for example in the biological sciences and the development of the Information Society.
The Information Society heralds a new revolution, equal in scale, intensity, effect and implications to the industrial revolution which spread throughout Europe and the New World into the nineteenth century.
Where this transformation will lead is not yet clear. In a sense, there will be no outcome as such, there is simply a continuous process. But there are already visible enormous implications for all aspects of life, in business and trade, work and employment, in education, health and leisure. Many traditional jobs are disappearing as new markets, new types of jobs and ways of working are being created. Long-established industries and ways of life are disappearing. Methods of communication, independent of time, place or defined structure, are emerging. The world is being reshaped on a gigantic scale.
aspects of life affected by the new technologies, prioritise actions to be taken and determine how niche areas can be developed. The Minister for Enterprise and Employment has established a steering committeee to develop the national information strategy.
But despite the significance of such issues, there is still a general lack of awareness shown by the public in S&T issues. The TIERNEY Report recommended that our aim must be to bring about a significant cultural shift in attitudes and to bring about better communication, interaction and mutual understanding between the scientific community, industry, Government, the media and the public.
The Government has decided to provide financial support for a campaign, to be organised by Forfás, which will promote improved awareness of the importance of science, technology and innovation.
Conclusion
Famous Irish Scientists
ROBERT BOYLE (1627-1691)
The most influential Irish-born scientist ever was Robert Boyle. He played a key role in the history of science because of his part in establishing the experimental method, on which all modern science is based. At that time, respected thinkers, like Christiaan Huygens and Gottfried Leibniz, were inclined to doubt the value of demonstrating by experiment what they (and all "rational" thinkers) knew to be true by logical reasoning alone. By using carefully devised experiments, Robert established the power of practical science, and knowledge took a giant leap forward.
Nicknamed "The son of the Earl of Cork and the father of Chemistry", Robert was born in Lismore, Co. Waterford, the youngest of fourteen children. After a spell at Eton College, and a grand tour of the Continent lasting six years, Robert began to take an interest in medicine and science. He managed (just) to avoid marriage, and so was able to devote himself entirely to his studies. He carried out important work on the air pump, which he developed, and which allowed him to investigate the nature and properties of the vacuum. For example, he demonstrated that sound could not be heard in a vacuum, that a candle was extinguished, and that an unfortunate cat died.
He was a founder of the Royal Society in London in 1660, and the next year he published the most famous of his many books The Sceptical Chymist. In this, he questioned the early belief that materials were made up of four elements - earth, air, fire, and water, instead anticipating modern atomic theory. He introduced many analytical tests, including the use of vegetable dyes as acid-base indicators, and flame tests to detect metals.
CHAPTER ONE
The Policy Formation Process
“September 30, 1659. I, poor miserable Robinson Crusoe, being shipwrecked during a dreadful storm, in the offing, came on shore on this dismal unfortunate island, which I call the Island of Despair, all the rest of the ship’s company being drowned, and myself almost dead.”
Robinson Crusoe
by Daniel Defoe
Introduction
The story of Robinson Crusoe intrigues economists. In the teaching of elementary economics, the story of the single individual, stranded on a desert island, is used as a dramatic device to strip down life to its alleged bare essentials - economic decision-making.
In Robinson Crusoe economists see intelligent, civilised, rational man thrown into a simple state of nature, depending on nothing but his skill and intelligence and subjected to nothing but the scarcity of resources clashing with the limitlessness of desires, and the resultant operation of the calculus of choice, the operation of the iron laws of economics.
The formation of public policy, including public spending decisions, is also represented by economics as something equally rational, logical, systematic; as much driven by prudential considerations such as value for money, coping with scarcity, assessing competing demands, opportunity cost and so on. The formulators of public policy, politicians and public servants alike, are, in the economist’s mind, political and public entrepreneurs, engaged always, as private entrepreneurs and individual consumers are said to be, in pure and unencumbered rational calculation. The economists view is that politicians and public servants going about their work are, at heart and in essence, no different from Defoe’s mariner of York.
Public policy theorists argue that the logic of the rational calculus must, in the end, cut through the complicating layers of culture, conflict, compromise and history - as allegedly in private life.
In private life however, the problem of choice for the consumer and the entrepreneur or manager can always ultimately be reduced to one of individual choice, including the choice of simply foregoing something.
The problem for public policy is a different kind of problem - the problem of collective action. How can we make concepts, such as social dividend and gain, cost (to whom?) and benefit (for whom?), apply in an operational way in the world of the provision of public services? How can public provision escape problems such as economic rent-seeking and “provider capture” at the expense of citizens and clients? Public provision is characterised by the absence or failure, to varying degrees, of markets, and ultimately by a concern with something as broad as the expansion of “our freedom to lead the lives we have reason to value”1.
One way in which we can begin to resolve these difficulties is through the ‘contractarian’ framework 1. Political parties offer voters both intrinsic ambitions (ends) and instrumental goals (means), otherwise known as manifestos. Political parties elected to power, which is to say governments, have a contract with civil society. Government and society need means of measuring compliance and performance. A contractarian framework offers this. It is a duality: a contract of promise between voters and party (for example, for security); and a contract of purchase, between government and providers of means (in our example, the police) for certain outputs (in this case, a low crime rate).
A switch towards seeing spending in terms of purchasing outputs as cheaply as possible, which is to say at the lowest possible tax rate, and away from measuring compliance and performance as inputs while attempting to measure efficiency, however defined, provides a framework within which the dilemmas of collective action and social provision can be resolved.
Much of the reform of public policy formation and public spending processes undertaken in Ireland in recent years represents a comprehensive attempt to impose discipline, order and democratic choice on the process of decision-making within government, but within the confines and subject to the requirements of a civil society organised on the European social model.
For example, the application of global limits by this Government on public spending and borrowing, and its commitment to the Maastricht guidelines, are attempts to impose logic, order and rationality on decision-making in the public domain.
report, Shaping our Future, provides medium to long-term goals and objectives for society and the economygenerally.
This White Paper falls within this general framework. It represents, among other things, a further advance in the process of imposing logic and rationality, clarity of social and economic purpose, and value for money rules, evaluation and economy in one area of public activity, science and technology policy. This is appropriate given the scale, complexity and multiplicity of purpose in Exchequer funding and support of science and research.
Science and Technology Policy Formation
Why is there in Ireland, as elsewhere, a large and growing commitment to S&T spending? There is no single answer. Obviously, employment creation is a major factor behind much of the funding and many of the spending programmes, particularly those of the industrial development agencies - IDA and Forbairt, SFADCo and Udaras na Gaeltachta.
S&T spending has, in recent years, become increasingly closely associated with support for industrial innovation. This White Paper will have considerably more to say on the subject of innovation in Chapter Two.
Industrial innovation requires upgrading of skills, the development and enhancement of the stock of human capital which is clearly another aim of S&T policy. This is an objective that underpins the Exchequer allocations to the development agencies, including in this instance FAS.
The advancement of knowledge as such, adding to society’s stock of knowledge, is another factor, certainly as regards the allocation of taxpayers’ money to and through the Department of Education, for example, and indeed a proportion of the spending funded through the Office of Science and Technology.
Are the balances struck between the various areas of spending, and between public funding and private spend, right - even if only roughly so? In other words, how well defined is the decision to Exchequer-fund at all, and how well chosen, monitored and defined are S&T spending and objectives?
As this White Paper will demonstrate, all of this is recognised and is being acted upon.
The establishment of a Cabinet Committee chaired by the Minister for Commerce Science and Technology, recommended by Tierney, is further evidence of a strong commitment to co-ordination, rationality and prioritisation in science and technology policy.
The switch, currently being implemented, to multi-annual budgeting for public spending generally should further assist prioritisation, evaluation and choice.
Now, in this White Paper, there are set out a series of Government decisions that will address and correct remaining problems and shortcomings and set a clear, positive course for the future.
The Government has recently embarked upon a major reform of procedure, decision-making and policy implementation within the civil service - the Strategic Management Initiative. The reader will find that the Government’s decisions in detail on STI policy, contained in Part II of the White Paper, are very much in sympathy with this reform. They represent a practical and pragmatic working through of the issues in a now well-defined and significantly important area of national development. Chapter Six, in particular, presents a number of reforms at Governmental level, which is to say at political and inter-departmental levels, aimed at improving co-ordination, prioritisation and evaluation, and ultimately performance.
THE ROLE OF SCIENCE IN MY DAY TO DAY LIFE
Dr. Gary O’Toole, St. Vincent’s Hospital
Sometimes I try to imagine doing my job 40 years ago, without all the gadgetry and technology available to me today. I work as a Junior Hospital Doctor in St. Vincent’s Hospital in Dublin, a busy teaching hospital. And the thought of not being able to avail of CT, MRI or Ultra Sound Scanners is very frightening - to say the least.
In my working day, I simply cannot avoid encountering science and technology. Every morning starts with a ‘Ward Round’, this involves a discussion on all the previous days results for the patients, which are, of course, printed neatly for the doctors by the now ubiquitous computer. All tests in hospital now are ordered by computer, confirmed on computer and results usually read by computer.
When I order a blood test on a patient, it is collected by the phlebotomist, sent to the laboratory and, in large batches, placed in a machine which, in a matter of minutes, can tell the scientists whether the patient is anaemic, has an infection, is low in cells that fight infection or is dehydrated. Years ago this was done ‘one sample at a time’ by a scientist looking down a microscope at each sample individually, and usually took about 30 minutes per sample. In St. Vincent’s Hospital, if a blood sample is sent in the connecting chute from the Intensive Care Unit to the Laboratory, the nurses and doctors can expect to have a result back in under 5 minutes. Put simply the computer is the greatest aid to medicine since the discovery of penicillin.
But it’s not just the computer that has helped medicine. Technology has advanced to such a great degree that some operations that, in the past, necessitated a 15 cm scar, are now done using a tiny fibre-optic camera, through three 1 cm incisions. Patients that had their operation done the old way, used to stay in hospital for about 8-10 days and suffer a lot of pain, but with the newer method they go home after 3 days, thanks to surgery that is virtually pain free.
Other more ‘Headline Grabbing’ procedures, now being done by doctors, include transplant surgery. St. Vincent’s Hospital is the Irish Centre for Liver Transplant Surgery. Other organs now being transplanted include kidneys, in Beaumont Hospital, and hearts, in the Mater Hospital. Every four years thousands of ‘transplant’ patients meet and compete in the World Transplant Games. People once so close to dying now compete over the 30 km cycle race or the 10 km road race. All truly remarkable achievements and all thanks to the scientific advances and research that taught us how to prevent the body ‘rejecting’ a transplanted organ.
CHAPTER TWO
Science, Technology and Innovation Policy at the Level of the Firm
inn’ovate vt introduce new things. [Collins pocket dictionary]
“It is a commonplace that innovation, defined as ‘the profitable and continuous exploitation of knowledge and techniques in new ways for fresh purposes in advance of the competition’, is crucial to competitiveness, and becoming increasingly so. Innovation includes R&D and the use of new technology, but it extends very much wider, covering every sector of manufacturing (not just high-technology ones) and incremental improvements as much as major changes. It does not necessarily involve investment or new technology.”
House of Commons Trade and Industry Committee Second Report on Competitiveness of UK Manufacturing Industry.
Introduction
Science and technology policy has come closely to be identified with the field of innovation. S&T has come even to be equated per se with innovation and it has all come to be seen by many to depend critically on public spending. These posited strict identities are not accurate. It is all somewhat more complicated, as the extract from the UK House of Commons report quoted at the beginning of this Chapter makes clear.
Innovation is about how better to make a widget and how to make a better widget. It is about novelty. It is about ideas. It is about new ways of working, new ways of organising and doing things, perhaps manufacturing a product, designing or developing an entirely new product or a new service, or operating or modifying a machine or plant. Innovation is about progress, however defined.
A spirit and culture of innovation is always to be valued. In the world of business it is a critical ingredient in securing competitiveness and self-sustaining growth. More generally, the innovative spirit and impulse enriches cultural life and the society. Finally, it is as necessary an ingredient in public administration as it is in the business of commerce and the life of the arts and sciences.
Science, Technology and their Role in Innovation
This is not a White Paper on innovation policy. It is a document on science and technology policy. However the view adopted in this White Paper is one that locates S&T policy as a subset of innovation policy. This is why, in this White Paper, we talk of STI - science, technology and their role in innovation policy. In turn, innovation policy is a most critical dimension to Irish industrial policy. This will also be a central theme of an Enterprise Strategy paper which will be published by the Minister for Enterprise and Employment in the coming months. In Ireland, industrial policy must concern itself critically with breeding a strong national culture of innovation.
The word innovation can be used both in a generic way, and also with some precision. We can talk legitimately in a very general way of “a spirit of innovation”, or we can talk much more precisely of “an innovation”. An innovation in this latter sense may typically have a technological base. It may, in other words, have its origin in the advance of technology, which is to say “society’s pool of knowledge regarding the industrial arts”, to quote the definition of a noted economist in this field, Edwin Mansfield.
However, an innovation may equally arise out of a change in technique. Mansfield goes on to observe that “whereas a technological change is an advance in knowledge, a change in technique is an alteration in the character of the equipment, products and organisation which are actually being used.”
Which type of act of innovation is the more socially and economically desirable? Can we say that innovation based on technological advance is superior to an innovation arising out of a change of technique?
An innovation based on a technological advance is certainly of a higher order than a change of technique. Both are to be valued and encouraged. Most critically, an accretion of incremental changes in technique can lead to technological advance, and even to patentable inventions 4 .
Innovation and innovation systems are about learning - learning by doing, by using and by interacting. A culture of continuous learning and improvement is, centrally, what we are intent on achieving.
Taking a long view we have to say that it is critically more important to have a strong culture of innovation than to try to hot-house grow inventions. A national culture that is characterised by, among other things, the impulse to innovate, to depart from the
A corporate sector that is driven by the competitive urge, in which any individual company constantly fights to depart from the status quo, to be first, better and smarter than the rest, is also likely to be characterised by high levels of innovation, a commitment to research and development, to design, to engineering, to training, to the enhancement of skills in the workforce, to continuous improvement and engagement in patenting. All of this we take as indicative of the impulse to innovate.
STI policy in Ireland must contribute to breeding a strong innovation culture in the national business community through encouraging and enhancing innovation in the appliance of science and technology in our industry and commerce.
STI policy seeks to achieve the constant engagement of the business community in the process of technological change and changes of technique, in order to increase employment, enhance productivity, competitiveness and ultimately profitability, growth and the living standards of all.
The Situation in Ireland
In Ireland, the impulse to innovate is not strong. The TIERNEY Report and other studies are clear on this. TIERNEY, for example, comments that “we have up to now adopted a passive approach”, that technological change “has come about, for the most part, through our attracting foreign companies or importing technology in the form of finished products”. The Report concludes that “We have assumed that, as a small and relatively isolated country, we do not need to develop our own expertise and can rely on purchasing innovation from others.” This model has worked to a significant degree, especially in terms of creating in Ireland a powerful, dynamic group of leading overseas companies using and developing advanced technologies, creating thousands of skilled jobs and exports. But the purchasing of innovation from others also implies that the indigenous sector loses out in terms of growth foregone, jobs lost, unemployment much higher than it should be, loss of markets, domestic and export, and worst of all, the loss of talent and the blighting of human potential.
A recent Forfás audit of 1995 business expenditure on research and development (BERD) tells a mixed story. On the one hand BERD was much higher than it was, say, five years earlier. It was growing rapidly. On the face of it this is good news.
national output in the five years to 1995, to reach 1 per cent of GDP, it is below the OECD and EU averages. However, it is not now markedly different from the rate found in some other small economies such as Denmark and Norway. R&D is, in effect, a capital input, a point acknowledged in all studies of R&D impact. What matters with R&D spend is the stock of spending over time and we need to have a substantially higher spend if we are to “catch up” with our competitors.
This overall picture masks certain disturbing features. R&D performance is confined to a very small proportion of companies. Forfás estimates that there were fewer than a thousand companies in Ireland engaged at all in systematic R&D in 1995 and no more than 300 companies spending more than £100,000 a year on the activity. There were less than 100 companies spending £0.5m a year on R&D and this small group accounted for 75 per cent of all BERD.
Most R&D activity was accounted for by overseas companies and the gap between overseas and indigenous companies widened considerably between 1988 and 1995. The average annual growth rate (allowing for inflation) in BERD among foreign-owned companies is considerably in excess of the growth rate among indigenous companies - 21 per cent per annum compared to 13 per cent. There are, nonetheless, some indications of an increased effort, in more recent years, by indigenous companies.
The sectoral profile for BERD is dominated by electronics (including software), engineering, pharmaceuticals and chemicals. The level of BERD in the food sector, the heart of the indigenous industrial base, is disappointingly, considerably less than the national average and is growing at no more than the national average.
STI policy in Ireland must work to create an economy characterised by sustainable full employment, high living standards, competition and innovation, indicated by an enterprise sector:
•••• featuring growing use of skilled and qualified staff, benchmarking against best practice, and rising systematic expenditure on R&D;
•••• engaged in trading products and services and using processes and
technologies, all of which constantly and continuously improve;
•••• generating and enhancing, as well as absorbing, new technology and
propagating new techniques.
This economy will also be characterised by companies, managements and workforces consumed by the ambition to develop new technologies, techniques and products from within themselves; and financial and public sectors fully supportive of this new, innovation culture.
Addressing the Deficiencies
But how does the State, to the extent that it must or can, pursue this ambition? There are perhaps eight high-level instrumental objectives:
• the purchasing of improvements in the technological and innovation capacities of indigenous companies through a portfolio of direct support measures such as Techstart, technology acquisition and technology audit;
• the purchasing of relevant and needed additions to the general pool of scientific and technical knowledge and know-how from providers of high-level research such as the Programmes in Advanced Technology;
• the acquisition by Ireland, through IDA Ireland, of facilities and businesses owned by leading overseas companies in high technology areas; their links with the indigenous economy; and the diffusion out of these companies of best practice and techniques;
• the purchasing of enhancements of the stock of human capital from education and training providers, including schools, colleges, third-level institutions and research bodies and State agencies;
• the cultivation of a culture of innovation through an approach that makes innovation a common thread linking together a range of policy areas - for example, fiscal, commercial law, education policy;
• the creation of a venturesome financial sector; • the maintenance of high growth; and
• the encouragement of competition.
Technology Transfer
Technology transfer is strictly speaking “the transfer of knowledge about techniques”. It does not necessarily and of itself represent an addition to a society’s pool of knowledge although it can lead to that.
STI policy support for transfer of technology operates through a number of mechanisms, for example promotion of and assistance to companies to enter into straightforward transfer (or buying in) of technology through entering into agreements with other companies (foreign or domestic) that possess higher level knowledge about techniques and technologies. The principal attraction of this kind of arrangement is that it can be a quicker and cheaper route in the short term to acquiring competence than developing and growing competence internally. However, taking the long view, we must see to it that technology transfer spurs the development of internal competency over time.
Human Capital
Companies can also achieve technological competence through a second route, through the hiring of skilled people - the purchasing, in effect, of human capital. Companies, particularly smaller firms, can usefully be assisted and encouraged to take on skilled, trained and qualified staff. Schemes such as Techstart are a case in point.
Taking the long-term view and from the policy standpoint of wishing to see the acquisition and growth of internal competencies, the enhancement of the technical skills and qualifications of in-company workforces is to be preferred.
That is not to suggest however that the technology transfer route versus the human capital approach is a simple case of "either/or". The State’s ‘contract’ with companies in receipt of funding under STI programmes should be seen as involving those companies making a contractual commitment in effect, to enhancing their innovation and technological capacities through investing in their human resources and their technology base. There are readily measurable indicators of output here: numbers of certificate, diploma and degree holders employed; engagement in further training and apprenticeship; level and incidence of intellectual property creation; expenditure on innovation.
Multinationals and Local Industry
The very location of overseas industry in Ireland is itself an act of technology transfer. In effect, Ireland negotiates contracts with multinational companies whereby they agree to locate facilities and functions in Ireland.
more fully integrated into the domestic economy. This is an aim of industrial policy, S&T policy and wider innovation policy.
The rationale for this ambition is twofold. It is good in its own right, and it is a route to more intensive linkages between the overseas and the domestic economy. However a key question in this respect is the capacity of indigenous companies to link into and meet the requirements of overseas companies. Links between the overseas and the indigenous sector could be stronger than they are although they have developed in recent years. However a number of points need to be made.
The amount of R&D activity now undertaken in Ireland by MNC’s is, in the aggregate, in both relative and absolute terms, considerable as the most recent Forfás R&D survey shows. Overseas companies’ BERD is the key driver in the recent rapid acceleration of corporate R&D activity in Ireland although the overseas companies that undertake BERD here are still a minority.
However, part of the problem must lie with indigenous industry. Again, we are back to the recurring theme, strongly expressed in the report of TIERNEY and other studies over the years: that of the general weakness of the indigenous business community, the national innovation system and culture. The exception to this general comment is the small group of high growth, high technology start-up companies created by a new generation of entrepreneurs. This new breed is usually highly trained and educated but, critically, has attitudes formed free of the protective formative experience that is ingrained in the minds of managements of older, bigger companies, engaged in traditional industries, based on old technologies and invariably dependent on the home or British markets. Many of these new entrepreneurs also are the products of the multinational experience. It was through contact with or employment in the Irish operations of overseas companies that they got their experience and their business ideas.
A primary focus, in relation to the further integration of the overseas companies into the economy, must initially be the enhancement of the innovative, technological and production capacities and competencies of an increasing number of indigenous companies, large and small, across the range of sectors and industries.
In terms of our outputs approach, the State is in the business of ‘purchasing’ the enhancement of technological and innovation capacities and competencies of Irish companies. In the case of overseas companies, achieving this objective should create a fertile soil in which that sector can set down stronger roots and further enhance the contribution it is making to national development. In achieving the objective for the indigenous sector, overseas companies have an important role to play - through, for example, demonstration, diffusion and innovation effects, the imposition of high standards on local sub-suppliers, creating a competitive culture and so on.
successfully attract mobile international investment it must have a population of dynamic indigenous companies, prospective partners for technologically advanced companies from abroad.
In all of this regard, an inputs/investment approach in general and the setting of global targets for BERD are not particularly meaningful. On BERD, as the Forfás 1993 Report on Research and Development in the Business Sector points out, “it is possible that such (macro) targets could be met without raising the R&D commitment of the vast majority of firms or even whole sectors of the economy.” Therefore, as Forfás suggests, targets for increasing the rate of BERD in indigenous firms, for example, should be set at the micro level.
All of this suggests that those STI policy initiatives, that form part of the policy portfolio aimed directly at the business sector, should:
•••• very much focus on raising the competence of indigenous companies;
•••• aim critically to increase the skills base, technological literacy and
qualification in the workforce employed in companies;
• measure results, including the incidence of BERD, at the disaggregated, micro level rather than in terms of broad, macro-level aggregates.
In Chapter Seven the reader will find detailed decisions dealing with STI policy vis-a-vis the corporate sector, indigenous and overseas, dealing with the need to increase employment of technologically qualified and literate staff; the need to increase R&D activity in business in Ireland; the encouragement of inter-firm networking and so forth.